Get exclusive money‑saving offers and guides

Unsecured Personal Loans

Rates and Fees verified correct on December 10th, 2016

Get access to much-needed funds end enjoy more flexibility with an unsecured personal loan.

An unsecured personal loan lets you borrow funds without using an asset as security. This type of loan comes with an increased amount of flexibility in terms how you use your loan amount. You can use your funds to make a large purchase, consolidate debt, or anything else you like. Find out if this type of loan is right for you by reading the guide below.

HSBC Personal Loan Offer

Apply for a HSBC Personal Loan and get competitive interest rate offer with a flexible range of repayment options.

Disclaimer and warning about borrowing

A representative example is expressed in the table above with all fees and charges payable in the Monthly Repayment column with the representative APR expressed in the comparison rate column.

* The personal loan offers compared on this page are chosen from a range of personal loans finder.com.au has access to track details from and is not representative of all the products available for comparison in the market. Products are displayed in no particular order or ranking. The use of terms 'Best' and 'Top' are not product ratings and are subject to our disclaimer. You should consider seeking independent financial advice and consider your own personal financial circumstances when comparing personal loans.

How unsecured personal loans work

Unsecured loans can be used for any worthwhile purpose. When you apply for the loan you may be asked to list why you are applying for it, and this will form part of the lender's decision.

When completing your application you will also need to list how much you want to borrow and how long for. Unsecured personal loans offer amounts varying between $1,000 and $50,000 and loan terms varying between one and seven years.

You'll find that unsecured loans come with higher rates than secured loans because the lender is taking on more of a risk. These loans can also come with establishment fees, monthly fees and annual fees, so be sure to check these before you apply.

Unsecured personal loans can be fixed or variable and repayment restrictions differ between lenders – you may be able to make additional repayments and repay your loan early without penalty depending on your loan.

Why is the interest rate higher than a secured loan?

Interest rates on unsecured loans are higher for borrowers as the bank takes on the risk of the loan. In the event of you defaulting on the loan, you'll have paid back more interest than a secured loan. If your loan is secured the lender can take the asset you've used for collateral to recoup the outstanding amount.

What to know to compare your options

Comparing your unsecured personal loan options is an important part of finding the right loan for you. Here are some things to keep in mind when doing so:

Minimum and maximum loan amounts. All lenders will set a minimum that you can borrow and the majority will have a maximum – these usually vary between $1,000 and $50,000. While you may not be eligible for either it's important to check that the amount you need falls between the two.

Fees and charges. You can be charged upfront and ongoing fees with unsecured personal loans, so check what these are before you apply. You can look at the comparison rate to see an overall cost for the loan which includes these fees.

Additional features. Your loan may come with additional features that you might find convenient, such as online account management, a redraw facility to access additional repayments or discounts on additional products offered by the lender.

Financing a trip away

Horace is looking for a way to finance his travels over the break before he returns to work as a school teacher. He doesn’t have enough money saved and so is looking to take out an unsecured personal loan, knowing he’ll be able to afford ongoing repayments on his current salary. He compares his options and finds a loan he’ll be able to afford to repay within a year, not wanting to run the risk of a longer repayment period in case he loses his job. He checks he’s eligible and then applies. He soon finds out he’s been approved and makes his way to the Canary Islands.

Weighing up the good and the not so good of unsecured personal loans

No asset needed for security.When getting an unsecured personal loan, there’s no need to supply an asset as security. If you're purchasing an asset with your funds you won't have to risk it, and you also won't need to risk an asset you already own.

Flexible loan purpose. You can use the funds however you like. Once you're approved the funds will be transferred to you and you can use them to consolidate debt, purchase what you need to or to invest.

Easy application process.Applying for one of these loans is usually quite easy. The application can typically take place online if you can provide the appropriate documentation required. After the application, you can usually get a response in 60 seconds.

Unsecured loans can have higher fees.As there is no security with an unsecured personal loan, there are higher fees enforced by the lender to compensate for the lack of security provided by you. This may come in the form of an establishment fee.

Penalties for missed payments.Again, as there is no security asset on an unsecured personal loan, the lender can charge you high fees for late payments or even take legal action against you and take you to court if you default on the loan.

Higher interest rates due to no collateral being offeredAs there is a higher risk involved from the lender, the interest rates are generally higher on unsecured loans. This is to cover the fact that there is no collateral involved with the loan.

Things you should consider avoiding

Lying about what you need the funds for. Always be upfront with your lender about why you're applying for the loan, whether it be for business purposes or to consolidate debts.

Getting into too much debt. If you are taking out an unsecured loan to consolidate existing debts, you should be wary of getting yourself into financial trouble by increasing your debt. Make sure you'll be paying less with this new loan than you are currently.

Check the brand providing your credit is licensed. Always make sure you are getting a loan from is a licensed lender. All providers must be licensed with ASIC; you can search through the ASIC Professional Register to check this.

Fees and charges. Where possible, always do your best to avoid excessive fees and charges. The best way to do this is to make sure you do your research, ask questions and compare.

How you can apply for an unsecured personal loan

If you think an unsecured personal loan is for you, all you need to do is use the finder.com.au comparison table to compare your unsecured personal loan options. After browsing through the table and finding a suitable loan, click the relevant link to go to the lender’s website and start the application process.

Typically, to get an unsecured personal loan you'll need to meet a range of criteria set by the lenders.

You must be at least 18 years old.

You must also have a good credit rating and be able to provide proof that you can pay off the loan.

You may be asked to provide copies of your payslips, bank account statements and other credit contracts.

You'll also need to provide 100 points of ID.

Frequently asked questions

Can I get an unsecured personal loan for business purposes?

Some lenders may allow you to use the funds from an unsecured personal loan for business purposes, but others will not. You will need to confirm this with the lender before you apply.

How can I get a low rate unsecured personal loan?

While unsecured personal loans do generally come with higher rates than secured personal loans, you can still find a competitive low rate option. Compare your options using the table above and find a loan that meets your budget.

How long do I have to repay an unsecured personal loan?

Fixed rate unsecured personal loans tend to offer terms of between one and five years and variable rate unsecured personal loans tend to offer terms of between one and seven years.

I applied for an unsecured personal loan but the rate I received was different to the advertised rate. Why?

There are two reasons this might have happened: A lender may operate on a tiered-rate system where your rate is determined by the information in your application, or the lender approved you but found you to be a higher risk, so applied a higher rate to your account.

Related Posts

Are you looking for a car loan? How about a personal loan that offers flexibility, or an unsecured personal loan? Bankwest may have the financing options for you. Learn more about its personal loan offerings in our guide.

Don't want to put your car up for collateral when applying for a loan? There are various unsecured car loan options you can consider for finance. Read on to find a car loan that is unsecured to help get you on the road for less than you thought.

St.George have a range of competitive personal loans on offer. Whether you're after a secured loan or unsecured personal loan, it can offer you a competitive product with flexible features. Learn more about its offerings and you're eligible to apply.

Find out all about the range of Latitude personal loans before you apply. Whether you're looking for a secured car loan or an unsecured personal loan to consolidate debt or make a large purchase or investment, this is the guide for you.

BankSA offers a range of loans for your next car. If you're looking to finance a new or used car you can consider a secured or unsecured personal loan from BankSA, both with competitive rates. Compare and apply today.

Ask a Question

Do not enter personal information (eg. surname, phone number, bank
details) as your question will be made public

finder.com.au is a financial comparison and information service, not a bank or
product provider

We cannot provide you with personal advice or recommendations

Your answer might already be waiting – check previous questions
below to see if yours has already been asked

Your Question

Subscribe to our newsletter

Notify me of followup comments via e-mail.

Disclaimer: At finder.com.au we provide factual information and general advice. Before
you make any decision about a product read the Product Disclosure Statement and consider
your own circumstances to decide whether it is appropriate for you.
Rates and fees mentioned in comments are correct at the time of publication.
By submitting this question you agree to the finder.com.au privacy policy,
receive follow up emails related to finder.com.au and to create a user account where further
replies to your questions will be sent.

26 Responses to Unsecured Personal Loans

Jacku01 |
October 13, 2016

I need 25,000 to build a deck on a new house we’ve just built.
Over 3 years, can I pay off early or make extra payments?
I can easily repay in less than 3 years, just want to make sure all is ok.

This depends on the lender you apply with. Usually you can make extra repayments and repay early on a variable rate loan, but again, this will depend on the lender. You can click on the names of the loans above to see a review page, where you’ll find a list of fees so you can see if extra repayments are allowed on the loan you’re considering.

You can compare your unsecured personal loan options on the page above. Each lender will have different eligibility criteria, which you can check on the review page by clicking on the name of the loan. The review page will also list the maximum loan amount able to be borrowed with the loan, but keep in mind how much you can borrow depends on your individual financial situation and how much you can afford.

You can compare your personal loan options on the page above, however keep in mind you’ll need to advise the purpose of your loan when you apply. As it’s to fund your home loan deposit lenders may be hesitant as it’s a risk. You can check the eligibility criteria for each loan by clicking through to the review pages and click “Go to Site” when you’re ready to apply. If you’re unsure of your eligibility, talking to the lender directly is a good place to start.

I have two personal loans at the moment, both used to purchase business equipment (still at startup stage) we have 33k over the both at the moment and are looking to borrow at least 40-50k to cover our last high interest loan and a bit of cash to get the rest of the business off the ground. We would need to do this unsecured as we are at 80% on our house after renos.

Your personal loan options are outlined on the page above. However with two out already you may have trouble being approved for a third. If it’s for business purposes you can find out a few of your business loan options on this page. You can browse through the lenders on the main page as well as on the sidebar as there are several different loan options available, from line of credit loans to lump sum payments. Some lenders require your business to be in operation for a certain amount of time but others will offer you financing at the startup phase. I can’t recommend a specific lender to you but you can compare your options on the page.

Hi,
I’m looking to borrow $25,000 & am trying to decide which is better:
an unsecured personal loan with a variable interest rate or a personal line of credit loan.
Could you please tell me the differences between them?
Thanks

There are a few differences between these two credit options, and actual products may differ between lenders. Generally, an unsecured personal loan is given to you as a lump sum payment and will be paid off over a period of between one and seven years (with interest). You may need to pay monthly fees or an establishment fee but these will be added onto your ongoing repayments. By making regular repayments your loan will be paid off in full. Depending on whether the loan is a fixed or variable rate your repayments may change, and you may or may not be able to make extra repayments or pay it off early.

Conversely, a line of credit loan gives you a total credit limit that you can access as and when you wish. It works more like a credit card in that you have access to a certain amount of money and you only pay for the amount of money you use. Once you pay a certain amount of the credit limit back you’ll have access to it again. There is generally no loan term and you’ll just need to make minimum repayments depending on how much you spend.

Remember that these products can differ so it’s best to check the terms before you apply.

Generally, banks require good credit history to approve you for a loan. One option might be to approach your existing bank for a loan if you have a good relationship with them. If you find they will not consider you, you can compare your bad credit personal loan options on this page.

According to ASIC, ‘Anyone who wants to engage in credit activities (including lenders, lessors and brokers) must be licensed with ASIC or be a representative of someone who is licensed’. Before submitting an application with any company or private loan lender you will need to check they are registered by searching ASIC Connect’s Professional Registers and also see if they are on the list of ASIC’s unlicensed companies. This lender is also required to give you their licence number, contact details, fees and charges for the loan and details of your right to complain or access to their external dispute resolution scheme.

Disclaimer -
Hive Empire Pty Ltd (trading as finder.com.au, ABN: 18 118 785 121) provides factual information, general advice and services on financial products as a Corporate Authorised Representative (432664) of Advice Evolution Pty Ltd AFSL 342880. Please refer to our FSG - Financial Products. We also provide general advice on credit products under our own Credit Licence ACL 385509. Please refer to our Credit Guide for more information. We can also provide you with general advice and factual information on about a range of other products, services and providers. We are also a Corporate Authorised Representative of Countrywide Tolstrup Financial Services Group Pty Ltd. ABN 51 586 953 292 AFSL 244436 for the provision of general insurance products. Please refer to our FSG - General Insurance. We hope that the information and general advice we can provide will help you make a more informed decision. We are not owned by any Bank or Insurer and we are not a product issuer or a credit provider. Although we cover a wide range of products, providers and services we don't cover every product, provider or service available in the market so there may be other options available to you. We also don't recommend specific products, services or providers. If you decide to apply for a product or service through our website you will be dealing directly with the provider of that product or service and not with us.
We endeavour to ensure that the information on this site is current and accurate but you should confirm any information with the product or service provider and read the information they can provide. If you are unsure you should get independent advice before you apply for any product or commit to any plan. (c) 2016.

Important information about this website

finder.com.au is one of Australia's leading comparison websites. We compare from a wide set of major banks, insurers and product issuers.

finder.com.au has access to track details from the product issuers listed on our sites. Although we provide information on the products offered by a wide range of issuers, we don't cover every available product. You should consider whether the products featured on our site are appropriate for your needs and seek independent advice if you have any questions.

The identification of a group of products, as 'Top' or 'Best' is a reflection of user preferences based on current website data. On a regular basis, analytics drive the creation of a list of popular products. Where these products are grouped, they appear in no particular order.

Where our site links to particular products or displays 'Go to site' buttons, we may receive a commission, referral fee or payment.

We try to take an open and transparent approach and provide a broad based comparison service. However, you should be aware that while we are an independently owned service, our comparison service does not include all providers or all products available in the market.

Some product issuers may provide products or offer services through multiple brands, associated companies or different labelling arrangements. This can make it difficult for consumers to compare alternatives or identify the companies behind the products. However, we aim to provide information to enable consumers to understand these issues.

Providing or obtaining an estimated insurance quote through us does not guarantee you can get the insurance. Acceptance by insurance companies is based on things like occupation, health and lifestyle. By providing you with the ability to apply for a credit card or loan we are not guaranteeing that your application will be approved. Your application for credit products is subject to the Provider's terms and conditions as well as their application and lending criteria.

Please read our website terms of use for more information about our services and our approach to privacy.